Wizards of the Coast vs. The Pirates: A Cautionary Tale

Earlier this week, Wizards of the Coast, the game company that produces Dungeons & Dragons, severed all of its contracts with online PDF stores, such as DriveThruRPG.com and RPGnow.com. They pulled all their PDF products, including the PDFs from previous editions of the D&D game, and simultaneously filed eight separate lawsuits against various people in the United States, the Philippines, and Poland. Why? Because they have discovered what the rest of us have known for years now--PDFs are available for distribution on peer-to-peer sharing networks. Welcome to the 21st century, WotC.

This move has alienated a lot of fans, because this move came without warning. Many people who had ordered a PDF through these digital stores were left in the cold by this move. In an interview conducted by Morrus of EnWorld, WotC president Mark Leeds said:

"While we understand that our actions will not eliminate piracy all together, we don't want to make it easy to acquire illegally, either. We need to have a strong retail base in order to support (and grow) the hobby industry. We hope to deter future offenders - or at least slow down their path to obtaining illegal products."

To which I say: You do not know your market very well. Worse, you don't understand the digital age very well.

WotC claims they made this decision because they were concerned about piracy--their latest supplement, the Players Handbook 2, was being downloaded at a ratio of 10 illegal downloads to 1 download purchased legally. This represents a fundamental disconnect from the realities of the ebook market. The WotC PDFs were being sold at the same retail price that their physical products were, which is to say, about $30 - $35 a book. This ludicrous overpricing of their digital works came about from the assumption that it was the content people were willing to pay for. This is not the case.

When a person buys a physical book, there are certain factors that add up to the cost, such as distribution, the cost of materials, and printers fees. A digital copy, however, has none of these costs attached to it, and therefor represents almost pure profit for the seller. People who are tech-savvy realize this. People who are shopping online for digital books realize this.

Now, gamers who are likely to buy a PDF are not buying it to replace the physical product. They are buying it as either a preview (in order to make an informed purchasing decision, much like you'd flip through a physical book in the store before deciding to buy it), or they are buying it to supplement their purchase (having a back-up can be handy for preparing adventures). The traditional use of a physical copy is to be used as a reference at the game table itself.

Sane humans do not feel the need to pay for the same information twice if they can help it. The physical product has costs associated with it that an electronic copy doesn't. Thus, an electronic copy of a physical work should be priced substantially lower than the price of the physical copy. Successful marketers who make PDF copies of their hardback products (such as Green Ronin Games) understand this. If you look, PDF copies are as much as half the price of the physical product. When it comes to WotC, however, I could (and have!) bought actual, physical copies of the book for less than was being charged for the PDF versions. WotC charged more than the market would bear. Is it any wonder consumers turned to other, cheaper alternatives?

Another issue is that WotC is targeting the wrong people in their shutdowns. The PDFs that were offered to the public were not the ones that were making their way to BitTorrent or RapidShare, and they never have been. When the original 4th Edition Core Books leaked onto the P2P networks, long before the physical books were even available, they were full of printers marks. And further books and supplements have gone live on the networks hours, even minutes, after being released.

Some monkey business is clearly going on at a level higher than the end users here. This points to leaks at the printers, or even within the company itself, not the consumers who are willing to buy their products (overpriced though the may be) from online distributors.

By chopping off the PDF sales, WotC is setting itself up for a public relations nightmare. They have already suffered significant loss of face with their failed "gleemax" initiative and the horribly botched "Dungeons & Dragons Insider" subscription service. They have consistently failed to roll with the changes the Web has had on all forms of media. This latest panicked reaction has endeared them even less to their customers, who are now being viewed as criminals. Treat your customers like criminals, and they will act that way. Instead of being 10% of the PDF market that exists for their products, they have decided to make themselves 0%. The only way customers can get the PDFs the obviously want is to get them illegally.

We won't have to wait long to see how horribly this will come back to bite WotC in the rear. Other companies, such as White Wolf Game Studios, have leaped at the chance to offer alternatives. And Arcane Power, the latest offering in the D&D line, is due out later this month. We won't wait long to see how much they have angered their fans. I predict that illegal downloads of home-made PDFs will explode. You're welcome to watch the fireworks.